Aoun to ISG: Lebanon’s Reform Program Needs Foreign Financial Support

President Michel Aoun highlighted Lebanon’s need for foreign financial support in order to carry out its reform program, during a meeting with the International Support Group for Lebanon at Baabda palace Monday.

Following is President Aoun’s address during the meeting:

“At the onset, allow me, your Excellencies, to express how saddened and sorry I am about what your peoples are going through due to the COVID-19 epidemic, knowing that you all represent countries that have been profoundly hit by the tragedy.

I would like to ask you to stand and observe a minute’s silence in memory of all the victims of this epidemic, in Lebanon and in the four corners of the world, and in tribute to the deceased of the diplomatic corps in Lebanon, the ambassador of the Philippines, Mrs. Bernardita Catalla.

Your Excellencies,

Esteemed audience,

I welcome you, ambassadors of friendly countries that have always accompanied Lebanon in its multiple crises, to such an extent as to create in 2013 the International Support Group in view of rallying support to help Lebanon and its institutions, especially with the exacerbation of the Syrian displacement crisis. As we thank you for the interest and support you have demonstrated throughout those years, we look up to further cooperation between us.

In its last meeting in Paris in December 2019, the ISG declared the willingness of the international community to support Lebanon to overcome its financial and economic crisis, with the precondition of establishing an efficient reliable government capable of fighting corruption and implementing a fundamental bundle of economic reforms.

At the pace of popular movements, in light of the growing economic, financial and social crisis, and despite all the political obstacles and hurdles, the desired government was formed indeed at the beginning of the present year, and pledged in its Ministerial Declaration to launch a rescue emergency plan and a reform basket, to fight corruption, adopt public finance solutions with economic measures to shift from a rentier economy to a productive one. If this plan is put on track, it is likely to pull Lebanon, gradually, out of the abyss where it has been hanging.

Esteemed audience,

Lebanon was getting ready to launch a workshop to address its economic, financial and social crises when the COVID-19 epidemic hit the world, so we had to declare a state of health emergency that required general mobilization. This has curbed Lebanon’s impetus to a certain extent, aggravated its crises and added to them the health crisis. And today, as we are facing all these crises and their repercussions, we welcome any international assistance from the friends of Lebanon.

I will expose to you now the challenges that we are confronted with, the ways that we adopt in dealing with them, and the assistance that we need, hoping that you take them into account upon approaching the Lebanese situation.

First – from an economic perspective:

Lebanon is suffering from an unprecedented crisis, characterized by a huge economic recession, a decrease in internal demand and imports, a severe shortage of foreign currencies, an increase in unemployment and poverty rates, along with an increase in prices and a devaluation of the Lebanese Pound through parallel markets, as well as a deficit in public finance entailed by decreased tax revenues.

For all these reasons, in order to stop the depletion of foreign reserves which have reached a very low level, and in an attempt to contain the budget deficit, the Lebanese State has decided on the 7th of March 2020 to suspend the payment of the due Eurobonds, and two international consultants have been appointed, one financial and the other legal, to support the government in this respect.

The Lebanese State is currently working on putting up a comprehensive financial and economic plan, within a national rescue program, aimed at correcting the deep deficiencies in the economy and addressing the distortions entailed by 30 years of wrong economic and financial policies, preceded by 15 years of destructive wars that undermined many of the economic, industrial and even humanitarian infrastructures.

Despite all urgent circumstances, this plan is about to be completed. It aims at solving the economic, financial and structural problems, restoring faith in the economy, reducing public debt, putting public finance on a sustainable track, restoring vigor and confidence to the financial sector by ensuring transparency through fiscal audit and accounting conciliation, as decided by the Council of Ministers, to unveil and redress accumulated losses, by rehabilitating credits for productive sectors, implementing reform measures to promote growth, increase productivity and enhance the competitiveness of the Lebanese economy, and correct as well the balance of payments. In parallel, a fiscal reform focuses on uprooting corruption, improving fiscal compliance, controlling waste and ensuring good management of the public sector. At all stages, the plan seeks to spare the most vulnerable categories and to promote social safety nets.

In view of the current dangerous financial situation and the tremendous economic fallout on the Lebanese, the residents and the displaced, our reform program will need foreign financial support, especially from friendly States and from the International Support Group for Lebanon, in order to back up the balance of payments and to develop our vital sectors, namely water, electricity, banks, transportation, etc. We also rely greatly on the 11 billion dollar funding pledged at the CEDRE conference, which will be mainly dedicated to investment in infrastructure projects.

Second – from a social perspective:

Social security is one of the conditions of national security. It is therefore imperative to look after all the factions of our people, especially those who suffer poverty or severe shortage of livelihood resources that ensure a minimal decent life by offering the necessary food, medical and financial aid.

The Ministry of Social Affairs has therefore put in place a contingency plan to counter the tragedies that are and will be entailed by this imminent crisis, in consultation with all concerned ministries and civil society. The plan adopts transparent criteria, responds to the needs within available public resources and helps the Lebanese families overcome the emerging crisis.

Third – from a health perspective:

The emerging COVID-19 virus has become a global pandemic that has hit all nations, claiming tens of thousands of victims at a growing pace.

In Lebanon, having swiftly taken measures and procedures has helped us curb the incidence of this epidemic, keeping it so far within a reasonable range, and we are striving to keep the increase in the number of cases within our containment capacity. We are also trying to bring our expatriates back home within the available resources.

There is no doubt that national self-sufficiency during health crises is one of the pillars of the resilience of States in such crises. By self-sufficiency I mean the availability of medical, nursing, paramedic personnel, equipments, machines and protection methods namely PPEs, masks, gloves, sanitizers, as well as the required medication.

Human resources are sufficiently available and dedicated in Lebanon, for which we are very thankful. As for equipment, tools and medication, the national industry has tried to fill some gaps, and here I can only pay tribute to the Lebanese youth who sharpened their creativity during this crisis, thus registering tentative inventions that are badly needed.

Yet, the largest part remains for import, with all the tremendous and urgent financial burdens that it thrusts upon us.

Fourth – the Syrian displacement crisis:

The crisis of the Syrian displaced still weighs heavily upon the Lebanese socioeconomic reality for years. I have already addressed the international community repeatedly to explain its negative repercussions on Lebanon, and call for the safe return of the displaced to their country.

Today, with the imminent danger of the epidemic outbreak of COVID-19, and the increase of this danger at the doors of both displaced and refugee camps, our heavily burdened Lebanon has addressed the international community, once more to remind it of its responsibilities towards this humanitarian crisis. It has also turned to the UN organizations, agencies and programs to provide prevention and medical care in camps and ensure the necessary assistance for those living there, through the plan put up by the Lebanese State and not separate from it.

Excellencies,

A few days ago, UN Secretary-General has qualified the COVID-19 pandemic as the worst global crisis since the end of World War II. He had also previously qualified the Syrian Displacement crisis as the worst humanitarian crisis since World War II.

Today, Lebanon cumulates, on its soil, the burden of the largest and worst two crises that have hit the world for seventy-five years. If the COVID-19 is a bad fate that affected most of the countries and of which we have had our share, we have been bearing, alone, the displacement crisis which has cost us more than 25 billion dollars, as per the recognition of international institutions, with no solution looming in the foreseeable future.

Your Excellencies,

Esteemed audience,

The world after COVID-19 will not be the same as before. It will be scarred with human wounds and exhausted by economic repercussions. So will the world of economic and financial brutality, the world of “I am strong then I am right” remain in place? Or will the suffering that has forged it turn it into a more humane and more solidary world?